Op-Ed

Set priorities for rural development

At issue | Sept. 2 Merlene Davis column, "Organization wants to localize philanthropy; Discretionary funds can help community"

The Kentucky Philanthropy Initiative recently released a statewide study documenting the amount of personal wealth in each county and the anticipated rate at which that wealth will be inherited by the next generation.

This "transfer of wealth" study is a big wake-up call, especially to those of us in southeastern Kentucky.

Home to more than half of the counties in the nation labeled distressed by the Appalachian Regional Commission, southeastern Kentucky is used to being on the bottom of lists, being scorned or pitied or simply dismissed as backward.

We are certainly not used to being considered valuable for much, particularly wealth. But there it is, in print with the research to back it up: Every county in these Appalachian foothills has the capacity to build its own community and our region.

We just have to do it.

In Perry County, the transfer of wealth over the next 10 years is estimated at $410 million. If we all imagined a brighter future for our children and counted the community of Hazard and Perry County among our heirs at just 5 percent of our estate, an incredible $20.5 million could be invested in community endowments. That investment would eventually return more than $1.03 million a year — forever — for education, health care, economic development, housing or any other priority.

Like any community, we need access to the same public money used in urban centers for infrastructure and basic services. We need consistently good leadership to plan for growth and development. We need to work together as a region and a state. We need all of our assets, including those we may secure as endowments.

But if we expect people to invest personal wealth in rural communities, we need to build responsible and productive community foundations to be honest and good stewards of endowments. And that may be the biggest problem.

The image most of us have of community foundations and local philanthropy is that it is something that wealthy people do to give back to the community and leave a legacy. But it is also almost always urban, with the benefits going to well-established causes and charities.

If there is hope for philanthropy to make a real difference in rural counties, it's going to have to look a bit different. There are good examples in some rural states of foundations committed to rural development philanthropy. They have expanded the notion of pooling large donations from individuals with very specific wishes to include building up other assets, too — people, natural resources, buildings and schools.

Rural development philanthropy also focuses on philanthropy as a community development activity where anyone can become a donor, and various kinds of asset development activities are used to promote a culture of working together.

Defining philanthropy more broadly this way can help raise expectations and produce outcomes that strengthen rural places and families. It can also substantially reduce dependency on outside funding; allowing local people to develop priorities and to build endowments for our own non-profits, schools and charities.

We've taken some important steps in Kentucky this year. We've passed legislation providing tax credits to people who make permanent investments to community foundations. We've set up an Endow Kentucky Commission of engaged citizens committed to ensuring the integrity of community foundations. And now we know what our giving potential is.

All that is left for us to do is convince each other that our communities are worth the investment of a small portion of our assets.

In southeastern Kentucky, and most of the other rural counties in our state, we have a lot of work to do. Not just in getting together and pooling our assets, but perhaps even more importantly in answering the question: Pooling assets for what?

Community foundations dedicated to answering this question may well be our best hope for building a prosperous, thriving and sustainable future for our children, especially in rural Appalachia.

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